0:00

An Instagram post gets an unexpected, boost a tick, tock catches in the algorithm sometimes.

That’s all it takes to launch someone in to internet Fame.

But then what this blew up is a new podcast documentary that reveals how social media stardom is made, it’s a different kind of Fame.

0:17

That’s not always as glamorous as it looks from Spotify and the ringer podcast Network.

I’m Alyssa Perez neck.

You can listen to this flew up on Spotify or wherever you get your podcasts.

Today’s episode is a very special, very feisty breakdown of all the Mayhem in the madness coming out of the social media world, we begin.

0:38

As we must with the news of the Week in Tech, which is the reign of chaos at Twitter under the ownership of Elon Musk.

Some people have written in to accuse me of being an Elon Musk sympathizer.

I don’t know that I’m a sympathizer.

What?

I think I am what I try to be is someone who tries to clearly, see all of elon’s accomplishments and all of his commentary.

1:00

And his labor record, and his wealth.

All of that clearly.

And I think that when you try to see all this stuff, clearly, the result is kind of an amazing mess.

So Elon is a thrillingly successful chief executive of companies that solve important Hardware.

1:17

Engineering challenges SpaceX, Tesla Twitter is not a hardware company and it has no hard engineering challenges.

Like all social media companies, its success depends on its ability to To program us the users.

1:33

That is what successful social media companies do Instagram.

YouTube Tick-Tock they attract hold your attention and sell advertising against it.

But Elon should not have bid for this company at forty.

Four billion dollars.

She did not want this company at forty, four billion dollars.

1:49

He tried to shimmy out of this deal, then realize his path to the Delaware Chancery Court was blocked, then came to be the unpro donor of a company where in barely a week or two of ownership, he’s already over scene.

A collapse in advertising Revenue to announce to Pivot to subscriptions, three, attempted to fire half the staff for attempted to rehire.

2:07

Some of that fired staff because it turned out, he fired people who were integral to the working of the company.

Now, it’d be one thing if he’ll on were flailing at Twitter while, the rest of social media was on some kind of rocket ship.

The opposite is true that meta the parent company of Facebook Mark Zuckerberg has embarked on a truly audacious and possibly suicidal plan to spend somewhere between.

2:30

Million and 200 billion dollars.

Building out a metaverse platform that is basically the price of an Apollo program.

So what the hell is happening at these companies and Beyond the lurid details and the gossip?

What does it say about the larger ecosystem of social media today?

2:50

Today’s guests are the co-host of the New York Times Tech podcast hard Fork.

Kevin ruse is a reporter at the times and a frequent guest on this show.

Casey Newton is the author of the platform newsletter.

We recorded this episode on Friday, but I think all of it is extremely relevant.

3:07

Today, we go inside Twitter to understand what employees are saying about their new boss.

We break down Elon strategy to Pivot towards subscriptions.

We explain why Zuck is betting the farm on an unproven.

Le G and most entertainingly.

3:23

We have a frisky fight about the relationship between Tech and media.

I’m Derek Thompson.

This is plain English.

3:53

Kevin ruse, Casey Newton.

Welcome to the podcast.

Thank you for having us.

It is great to see you guys.

You are off to a sensational start with hard Fork.

It’s really, really wonderful and I want to start with your latest breaking reporting.

You guys have both spoken to people inside of Twitter after Elon announced that he would essentially be be laying off 50% of the staff sometime.

4:17

Today of all the stories that you’ve heard from inside Twitter.

In this unbelievably hectic period, the people sleeping on the floor working, 20 hours being forced to print their code on eight and a half by 11 sheets of paper and handing it in to their new bosses.

4:34

What is the craziest thing that you’ve uncovered from inside Twitter in the last week?

Casey, we’ll start with you Irene.

Look, it’s it’s very sad, you know, like right now the whole Spotlight of the world is on this one company that is so important to so many of us.

4:54

And there is a lot of it that that is funny and I like being asked to print out your code and then shred it, you know, an hour later whatever.

But I mean to me, the craziest thing is just that the people who were up all night coding and who are sleeping in the office like they’re fired now like you know the the people that worked the hardest, the did everything to save their jobs.

5:14

It didn’t say their jobs, right?

They’re gone.

They worked as hard as they could, and it did matter.

And now they got to go find something else to do so, you know, it is a truly dizzying morning.

I have never woken up to more signal messages in my entire life.

Frankly, I’m still sorting through everything that I have been hearing, but, you know, the one thing that I might say, just to kick it off, is that the people who left and the people who are still there, the sort of feel equally sad and and and both sides are sort of wondering if they’re happy where they are or if they will They were on the other side and Kevin are they hearing from Elon Musk directly or are they basically logged into Twitter, like, the rest of us to hear his hourly proclamations about the future of the company?

5:57

Yeah, this has been one of the wildest parts of this is that there’s been essentially no internal communication at Twitter since the deal went through.

Actually, there was the first that many people heard from the company itself, was this notice yesterday that they were about to have layoffs.

6:13

So A week of total chaos.

Very little, if any internal communication coming through the official channels.

And, you know, they’ve been tweeting and logging into Twitter like the rest of us and also like, like texting and calling us.

6:29

And that’s like, to me, that’s a good heuristic for like, when you know, things have gone sideways that your company is when employees are texting reporters to try to figure out what’s going on with their own colleagues.

Yeah, also like the emails that they got they weren’t from Elan bus.

They were they were From something called team and they were signed Twitter, like, nobody is putting their names on anything at this company, who is running Twitter right now.

6:52

I mean, from the outside, it seems to me.

Like, you’ve got Elon, you’ve got the host of the all in podcast, like Jason calacanis, David Sachs who have basically taken a week off.

I assume from recording their podcast in order to run a major.

Now, private company who’s running this operation.

7:11

Just podcasters, it’s those two and three robbed.

Krishna who has his own podcast Andromeda Andreessen Horowitz right that’s right.

And yeah presumably they’ll be bringing in more podcasters as the week’s go on.

Let’s take a brief moment to assume that the podcasters and car and rocket ship CEOs running Twitter right now are doing the right thing or at least doing an understandable thing, what is the most reasonable gloss that you can put on Elon Musk strategy for Twitter right now?

7:51

All I let Kevin cave for Elon Musk.

No, I I think look, there have been people who are supportive of Ilan who have said to me you know this isn’t novel up a private Equity takeover of a company followed by Massive layoffs and restructuring and people feeling like their new boss is evil.

8:14

Like that kind of thing.

Happens all the time.

It just happens usually in boring industries that nobody cares about like steel or you know, auto manufacturing or health.

Care or insurance.

And we don’t hear about that because that’s just normal corporate cost-cutting and drama.

8:33

And what’s just different about this is that it’s happening at Twitter, which everyone in the media loves to talk about.

And so it looks much larger than it is.

I’ve heard that argument made.

I don’t buy that frankly in part because this is not a normal private Equity take over.

8:49

This is the richest man in the world.

Overpaying by an order of magnitude for one of the most important communications platform The world and doing so seemingly at least partially out of spite for the company, its power users and its employees Casey.

9:06

The Reuters reporting on the possibility that the Steep cuts at Twitter particularly on their engineering team, their infrastructure team could put the website itself at risk, okay?

That when users are rushing to Twitter to consume and Share info such as during moments of Crisis or political event, the site could crash.

9:25

Yeah, it’s like read that I was like, is there a major political event coming up like maybe a midterm election in 70 to 100 hours?

What is the risk of cleaving half of your head count when the company still has to function on an hour-to-hour basis?

9:43

It’s extremely high.

I do not think it is a bold prediction to assume that sometime in the next few weeks, there will be an extended Twitter outage, right?

The people who took over this company spent less than a week trying to sort out who they Did to keep the server’s running.

If you remember there was a whistleblower complaint filed earlier this year that said that, if certain servers went down the company wasn’t entirely clear, they would be able to get them up and running again.

10:07

So yes, like we should just expect that there will be a major extended Twitter outage Casey back to you.

Is there any feeling among people who are working at Twitter or people that you were talking to about musk’s dealings with Twitter that there’s a Galaxy brain take here that he might not.

10:25

I want the company to succeed that there might be benefits to dragging the going big, shooting for the moon.

And if it fails moving through bankruptcy, court order to discharge all of the debt that he’s taken on.

In order to buy a company.

10:41

That he very clearly was not that interested in buying for the last few months, I don’t know.

That sounds pretty complicated and weird to me.

I think that he basically, you know, he wanted it that he did want it.

Then he decided that what the heck like I guess I Inside a binding agreement.

10:56

I guess I’m going to take it over anyway, I can’t really get out of this and so now he’s going to try to make a go of it.

But I mean, if there’s one thing we’ve learned over the past year, it’s like if you want to sort of, you know, guess as deal on must motives like, have fun.

But you know, you’re probably going to be, you know, proven wrong the next day when he changes his mind again, Kevin to you on the strategy Elon musk’s plan to turn around Twitter right now seems to be based around the idea that users should pay eight dollars a month to be verified to get a blue checkmark.

11:25

And then maybe to benefit from certain increases in visibility in replies and searches.

Tell me a little bit about why you think this is the strategy that Elon is settled on for his first attempt to drag Twitter toward profitability.

11:43

I think, frankly, it’s the one that’s the easiest, it’s sort of a low-hanging idea every social platform.

You know, every every media platform, everyone is Struggling with advertising right now, we’re in an economic downturn in global economic downturns.

12:02

One of the first things that gets cut by big companies is their advertising budgets.

And so this is not a Twitter specific problem, all across the industry ad revenue is dropping precipitously.

And so even if Elon had not bought Twitter, Twitter would be looking pretty urgently for some ways of making money that don’t rely on big checks from advertisers and so they were already working on subscriptions.

12:27

That was already a change that they wanted to make.

But this is a company that is still 89 percent of its Revenue comes from ads.

And so I think the the strategy here is to diversify away from that both because of the macro environment right now and also because advertisers are really skittish.

12:44

When it comes to Twitter specifically, right now, we saw Elon Musk tweeting this morning, that Twitter is suffering a major Revenue collapse, because advertisers are Pulling back their spending on the platform.

So I think he knew that was happening.

Knew that was going to happen more and more.

13:01

It’s a point of real vulnerability for Twitter because it’s not as big as Facebook or Instagram or some of these other platforms that command, massive advertising revenue.

And it’s a point of, you know, of weakness for the platform.

And so, I think the move to subscriptions and to start charging people is just the sort of first step in a move to try to diversify away from that.

13:25

Casey, I want to ask you about where Twitter fits in the landscape of the social media industry.

So last quarter snap announced quarterly income revenue of 1.13 billion dollars and in its last quarterly earnings report publicly as a public company.

Twitter announced basically the exact same quarterly income one point, one eight billion dollars now, snap started the pandemic with 3,500 employees, they then grew to about a little more than 6,000 employees and now they’re going through layoffs.

13:52

Twitter is not done layoffs in the last few months.

They’ve Not done laughs during the big Tech crashing in in the equity markets because they’ve been frozen in the Elan zone for a while, but the company has 7500 employees you divide that in half which is roughly what musk is trying to do right now and you’re basically where snap was in March 2020 in terms of your head count.

14:14

So you take that and you think well, you know, it’s not that crazy to think that Twitter, right sized should be roughly three to four thousand employees.

Meanwhile like musk is out there complaining about this.

Massive drop in advertising Revenue due to what he sees as activists online.

14:32

You know ginning up a lot of mean stories about Twitter but again this story also seems to have a structural explanation like the story of the year as you’ve written about is social media has been in an across-the-board slow down when it comes to advertising.

Am I crazy to think that behind the Elon Musk craziness?

14:51

A lot of the stuff happening to Twitter right now.

The scale of the Layoffs, not the way they’re being done but this but the numbers, the scale of the layoffs and the drop in advertising plus the Frantic pivot to not advertising Revenue sources.

That all of this is actually about industry-wide Trends macro Trends and not just about Elon Musk being Twitter.

15:11

CEO.

I really like, are there industry-wide friends?

Yes.

Is this basically, just a story about Elon Musk like also?

Yes, like I don’t know, like, you know, you make up a bunch of valid points.

I think that snap.

Twitter are fairly different businesses, right?

15:27

Like Snap is the messaging business for teenagers and Twitter is the source of all news and information for the people who write all news and information on the earth.

I think you are not going to need the exact same staffs even if the revenue happened to be the same.

15:42

You know, I think Twitter has been a really mismanaged business for a long time.

They could have much more Diversified revenue streams.

If they had sort of started sooner, they were working on a bunch of Creator, Focus Revenue products over the past year, as well as beginning to start subscriptions.

16:01

You know, to me like one of the tragedies of this is that Twitter was actually starting to get some pretty good ideas about what its business should be.

And they were starting to roll those out and iterate on them.

And then Jack Dorsey last November decided he didn’t want to be.

See you anymore was tired of dealing with his board who hated it.

So he left and they brought a Agarwal and Prague had about two weeks to try to figure out what he was going to do is CEO for you.

16:21

Like my said, no, my turn and like, that’s kind of where we are.

But I think there is something I want to just make a point there, which is that I think there is kind of this emerging consensus among the CEO class in the tech World, which I would also put Venture capitalists in that bucket.

16:38

That all of the big tech companies are over staffed by a lot that it’s not just, you know, a ten percent reduction that they need that, you know, there are people who think that all of these companies should be firing after workers.

And so, I think there are a lot of CEOs, who sort of wish that they had the Cover to do, what Elon is doing at Twitter right now and part of that is just, you know, CEOs always want to cut costs as part of the Mandate.

17:04

But I also think there’s a sense that the, the hiring of the past few years has been out of control and that these companies have gotten bloated and inefficient and you know, kind of looking like incumbent Legacy businesses that they were once trying to disrupt but do these companies still all have?

17:22

Like I don’t know. 40, 50 percent profit margin.

Like, you know, you look at the average revenue per employee isn’t still in the millions like I do when I hear people start to talk about like bloating and inefficiency, I just hear like capitalist vulture, who wants to squeeze a few more pennies out of the Enterprise?

17:37

Yeah, I mean, my hot take is this, this is actually about those Tick-Tock videos that are like the day in the life Tick, Tock videos from Tech employees wear this, they just look like they’re spending all day like drinking fancy lattes and like eating poke bowls on the, you know, in the in the courtyard of the office and That you know Tech CEOs and venture capitalist saw those and just went into like you know spasms of Rage.

18:01

It’s funny to think that Tick-Tock is destroying American tech companies in two ways that only is it eating their lunch on the consumer demand side but also is demonstrating that no one in Tech is working again.

I don’t actually think that no one is in Texas working these Tick.

Tock, videos are obviously a small minority.

Casey, I think you’re right to point out the fact that like there is a lot of talk about tech being bloated, but when you Look at Revenue per person or when you look at profit per person and you line that up with almost any industry from the 1990s 1980s 1970s 1960s it’s like Google today.

18:35

Would be like the most profitable per person company for like basically every decade exactly 100 Years of capitalism’s.

Exactly.

But there are there are new expectations in this current environment, maybe because of the direction of online advertising Revenue, I want to ask a little bit about a subplot and the Twitter drama, which is Is this fight between Silicon Valley and Tech media, David Sachs?

19:02

Who is a trump friend?

And one of the copilot’s now of Twitter responded on Twitter to criticisms of the Elon Musk plan to charge people a dollars a month.

He said, this quote, the entitled Elite is not mad that they have to pay eight dollars a month.

19:18

They’re mad that anyone can pay eight dollars a month and quote and there’s this idea.

Within the people in elon’s corner that journalists are mad at Elon because the value of our blue checks is going to be diluted by this new business strategy, and I just want to lift up and say that is so wrong.

19:42

It’s almost amazing.

Like, I am an entitled Elite with a blue checkmark, I never think about it.

I couldn’t care less about it.

If anybody can pay eight dollars a month to get a symbol by their username, a symbol that I never look at is I’m Interacting with the platform like fine.

I don’t care.

19:58

Why do they think?

We care Irene do that.

I like I’m hesitant to even assume that David Sachs is tweeting and good faith, right?

Like the company, got a lot of pushback for introducing this plan and what, what other choice do they have, but to present it as some sort of populist intervention, you know, in the face of overwhelming outcry, I think it genuinely does annoy them.

20:25

That journalists are verified on Twitter and that some of their friends in Tech aren’t and that maybe their friends are rich and Powerful but they didn’t work at CNET in 2013 and so.

So they don’t have a check next to their names and it’s like I think it really gets under their skin that journalists.

20:45

And I would say accurately, they perceive that journalists have kind of a special status on Twitter, right?

Not just because of being more likely, to be verified.

But you know, they sort of occupy, a large percentage of the conversation on at least certain pockets of Twitter and so I think that really does get under their skin and annoy them.

21:05

And so I think this a it’s very funny that the populist Revolution at Twitter is being led by David sack had a Marie Antoinette themed birthday party.

Whose entire podcast is like him.

And his rich friends talking about a flying private and wearing four hundred dollar baseball hats.

21:21

Like there’s a runt, there’s a running gag on All In But how David Sachs has a baseball hat is very very expensive.

And so just the fact that like he is the one leading, the populist Revolution, I just find incredibly satisfying but I do think it really gets under their skin and I think this is sort of their misguided attempt to kind of get back at the blue checks is to make them pay up, let them eat checks.

21:45

You saw that with Elon Musk himself like he got into this strange Twitter fight with AOC the other day where she was tweeting criticisms of him and he said, Basically thanks for your feedback and now pay eight dollars.

So this is like it’s really an attempt to kind of get revenge on the people that they feel have wronged them.

22:05

This story, you know, Ilan reply, David Sachs, tweet that’s gossip.

But underneath the gossip, I do think that there is a real and interesting animosity that has emerged between Tech media and Silicon Valley Executives.

22:22

You go back to the early 2010’s My sense is that and maybe this is a mistake in sense.

There was a more positive valence from most tech coverage toward technology and that that changed in the last decade.

And there was this quote from medic lasius that I wanted to read to you Kevin and have you respond to and possibly reject or possibly agree with.

22:45

He said, quote what happened is it a few years ago the New York Times made a weird editorial decision with it’s Tech coverage instead of covering the industry with a business press lens or a consumer lens, they started covering it with a very tough investigative lens.

Highly oppositional at all times and occasionally unfair, almost never curious about technology or in awe of progress in potential.

23:07

This was a very deliberate top-down decision.

They decided Tech was a major Power Center and they needed scrutiny and needed to be taken down a Peg.

And this style of coverage became very widespread and prominent in the industry and quote.

Kevin is he right?

23:23

Was there a top-down eat it.

At the New York Times to darken your coverage of Silicon Valley if there was, I didn’t get it.

So I must be on the wrong email list because I have never been told from the top or anything that could be construed as the top of the New York Times that I needed to cover some company more critically or be meaner to Tech Executives or something.

23:48

That’s just like not how coverage works at a place like the New York Times.

So I You know, I’m not sort of going to speak on behalf of the whole institution.

I will just say that my vantage point is that it’s not actually that there was a top-down edict, that, that frankly wouldn’t work.

24:09

Like journalists are pretty ornery, anti-authoritarian bunch and era, anti-authority bunch.

And so, I think if we did get some kind of edict, it would a immediately have leaked because people would have been so mad about it.

And, and it just wouldn’t have produced the changes that whoever Is doing that.

24:25

The edict ordering would have would have wanted, but I do think there’s, I do think it’s true that the tenor of tech coverage, broadly has gotten more oppositional in the past.

You know, I would say 10 years, but especially since 2016 and, you know, there are two ways of explaining that one.

24:47

Is that the entire, you know, Tech press decided sort of independently or in a shadowy cabal, somewhere to be mean to Tech.

The other is that the tech companies became the most powerful companies.

Yes, is what I hate about your framing Derek.

There is such an insane Amnesia.

25:03

It’s like, we all pretend.

Like, we don’t remember what the 2010s were like, is like, oh, yeah, what I guess.

I remember we all used to love Tech in 2010.

Go read any story about 2nd 2010.

You know what we were doing?

Completely dismissing.

These companies, go read a story about the Facebook IPO, and tell me how positive it was about Facebook.

25:21

We only ever said one thing about these companies collectively generally is In which was, they’re never going to be able to make any money.

You can never run an ad business on these things.

It’s just a bunch of hype.

We’re lit, were reliving, the.com era over again and pretty soon.

The bubble is going to burst and everyone is going to be high and dry, right?

25:39

And for some reason we look back over like man, all those texts.

Journalists in 2010, all they used to write about was how amazing the tech companies were no.

We did it.

We didn’t take them seriously enough.

And that’s why in 2016 we all collectively said, maybe we need to scrutinize this thing.

25:54

In that, we were dismissing for 10 years, right?

And it’s like, if say the past 10 years had not seen tech companies becoming the biggest companies in the world but instead you know, insurance companies had become the biggest companies in the world.

26:10

So you know seven or eight of the top 10 market caps in the world, the power to influence, you know elections and culture and politics across the globe.

Like I imagined that mainstream media organizations would have Focused much more critically on the insurance industry.

26:28

So I think this is this stems.

I think that the observation that the tenor of tech coverage has changed is correct, but I think the explanation is almost entirely wrong.

And instead, what you had was a sector that was seen, as sort of a sort of side show that wasn’t taken seriously.

26:46

All of a sudden, a mast is extraordinary power and influence and capital and the coverage sir, followed from there.

And I think that if you’re a tech CEOs, sort of seen this whole thing going on, like I think it’s fair to be offended at that and say wait a minute we you know we didn’t you know why are people who were maybe nice to us ten years ago suddenly being critical of us and I think that they just they should do a little more self-reflection about why that is instead of pointing like weird conspiracy theories, it seems to me that like the coverage and like the late 2000s and early 2010’s is like most typified by something like TechCrunch.

27:25

Buy something that was interested in the promise of new gadgets and reported on new gadgets and new emerging startups through what they could accomplish.

And of course, as those startups became the most valuable and most powerful companies in the world.

27:43

The approach to them shifted from Curiosity and mixed with dismissal toward one of relatively unified skepticism.

This is MM.

And even opposition is Kevin said, I think that transition is absolutely real.

27:59

Whether that transition was motivated by an inappropriate bias, that that’s his own question but like the transition seems absolutely obvious to me and I’m surprised that you don’t think it exists.

Well I mean, I think the transition exist but for some reason we want to ascribe these dark motives to it and it’s like rewind to 2010 which is when I got to San Francisco, I started writing about.

28:24

Technology.

The App Store on the iPhone is maybe two or three years old, you have this pre Cambrian explosion of Technology every week, your smartphone is getting a new superpower, you know.

You didn’t used to be able to hold up your phone in the grocery store to figure out what song was playing, right?

You didn’t used to be able to tap to sort of mash the screen of your phone with your paw and summon a vehicle to your exact location, but you could.

28:47

So we were curious about them and, you know, it’s a sort of hilarious to me that that it’s like what people really people talk as if what they wanted TechCrunch to me, do Ang in 2008 was to be, like, there’s a new app called Uber that someone’s a car to your literal location to take you wherever you want to go.

But, you know, we gotta ask, you know, in 10 years will the gig economy have supplanted like all like full-time employment in America.

29:10

You know, I am sure that there were cases where we should have asked harder questions from the jump, but like ultimately that’s just honestly not really the kind of Technology coverage I want.

I think when new technologies are introduced, that have some instant immediate benefit to people, It’s okay to just write a four hundred word story that describes that without trying to deliver an absolute moral judgment about every possible application of the technology.

29:34

Different stories require different treatments.

The story that a company is going from 0 to 1 is a story of curiosity.

Who this thing didn’t exist?

And now it exists, I couldn’t hail a cab on my phone and now I can Facebook didn’t unite the world as a kind of Global newspaper, but now, it did, let’s see how this evolves and then it evolves and then you report the stories that evolved in those stories are ones of power and responsibility.

29:54

T-that’s a look to add one more thing on this because I do get touchy about this particular narrative.

That the New York Times is, you know, somehow like wall-to-wall anti-tech like the people are saying that just do not read the New York Times, Like, pick up the paper, go to the website, look at the stories, it’s not wall-to-wall.

30:14

Tech is bad.

Like you know, stories are written all the time about new and interesting things happening in tech industry.

Some of them appear in the text section, some of them don’t, but they’re, they’re out there.

You know, we had an episode of our podcast, the other day with cash from your Hill who published a big story in the New York Times, about her experience in Facebook’s metaverse, which was, for her positive like that.

30:38

That story wasn’t.

You know, that’s very wasn’t suppress.

It wasn’t killed in the editing process, like nothing happened to her, as a result of this.

I think there’s this idea that there’s, this sort of shadowy group of New York Times, editors who just like any time, they see a positive text Story coming across.

30:54

Their desk.

They’re just like stamping it with the big rubber stamp, you know, the big rubber kill stamp and you know putting it in the trash and that’s just not true.

I mean the the most criticism I’ve gotten for something that I’ve written in the past year was actually a piece that was criticized for being too positive about.

31:10

And remember so, you know, we’re sort of getting it from both directions, there are people who think we’re too positive about certain pieces of tech and then people who think we’re too - about certain pieces of tech.

And so from the inside it’s just like that the, the sort of Iglesias Just does not ring true at all to me.

31:26

Can I also just say, I think people are such babies about media coverage.

They read a story and if it isn’t precisely calibrated to their personal specific, emotion about that information.

They think it’s a crime against journalism and I’m just here to tell you, that’s not the way that media is actually supposed to work.

31:47

We go out, we interview you people, we tell you what we find, we give you a couple ways to think about it, and then, guess what sweetheart, you can make up your own mind.

Okay.

So stop coming to me complaining that whatever I wrote didn’t match your exact mood whenever you happen to read it because that’s how babies think.

32:05

It’s also just not how other Industries work like I used to cover Wall Street and like, you know, Executives at Goldman Sachs, you know, whatever their flaws.

Like, they’re not sitting there all day, just like tweeting about how mean the financial press was to them, like they kind of get it.

32:21

They’re like we’re powerful.

We work at a big Institution It has, you know, consequences on, you know, lots of people’s lives and like, with that come scrutiny and we’re going to be like grown-ups and just sort of accept it.

That’s sort of the price of power.

And it seems like the the folks in Tech have not quite gotten there yet, I’ll say this.

32:39

I’m very glad that I was cream debt in part because there’s this idea with in Tech that journalists are all the same that we all agree with one another.

They were all motivated by the exact same status anxieties and shared the exact same techno pessimism.

And it turns out no, like, we scream at each other to like we fiercely gree.

32:55

Not only that what coverage is appropriate but also about like, what underlying motivations change that coverage, is it?

Is it, is it jealousy?

Is it Envy of tech?

Is it the fact that Tech actually changed and went from being like a really fascinating start up to being a like world-conquering Behemoth?

Like these are actually like interesting debates that happen inside of newsrooms and like journalist scream at each other and that’s that’s actually good.

33:15

Like it’s good that we don’t agree about absolutely everything that has to do with the big Tech narrative.

So that’s just my pathological optimism trying to shine through the that.

That segment I love.

I love that.

That was a bit of a fight.

Can we move to Mark Zuckerberg?

33:34

And the metaverse there’s a way in which despite everything that Elon is doing and all the weirdness has that are happening inside of Twitter.

People, sleeping on floors and printing out their code that was happening at meta.

And Facebook is actually weirder meta, could plausibly spend more than 200 billion dollars on its metaverse Department reality Labs, which would make this project larger in inflation-adjusted dollars than the Manhattan Project would basically put an equal footing with the Apollo G.

34:02

KC Y is Zach doing this good question and I will say that I agree with you that this is an extremely risky thing and I do think it’s the riskiest thing that he’s ever tried.

Okay, so ask yourself though, why is he doing this?

34:18

Well let’s look at the status quo.

He has a handful of social platforms where while they continue to grow in unprofitable markets.

For the most part, they’ve penetrated every wealthy.

Are on earth and those properties are now just all in manage Decline.

34:36

And as they are in manage the client, he has Tim Cook coming and saying, actually I’d rather build an ad business.

And so now yours has to die.

And so that process has now begun.

And so if you’re Zuckerberg and you’re one of the, like most ruthless and effective business, people of all time, you realize that you’ve made one key mistake, which is that your business is dependent.

35:01

It on someone else’s platform and for him to get what he wants which is to have, you know, sort of like an all-time platform that will long outlive him.

He needs to own that platform and because all of the current platforms have been built, but right, he has to go out and build the next one.

35:20

And so there is no price.

He will not pay to go do that, right?

His alternative is to be to drift into a relevance and that is not a price.

Mark, Zuckerberg is willing to Yep, Zuckerberg and Facebook are essentially renters on the iPhone, their renters on Samsung devices.

35:38

They are living in a world that is owned by someone else and he’s like, no, I want to be a homeowner in the tech universe and the way to do that is to build your own platform and that platform could be virtual reality.

It could be headsets that we wear, it could be something else that extends our Consciousness into some other dimension.

35:56

Kevin, how do you evaluate the reality Labs bet?

Do you see it?

It as a rational response to the existential threat of Apple.

Do you see it as an absolutely ludicrous pipe dream?

Where do you see it as essentially both?

It’s both.

36:11

I think the as Casey said I think the walls are closing in on him and he sees that this is the sort of way out you know he can manage a declining business of for as long as it lasts until there’s nothing left in the well or he can you know try to at any can’t in the old days, what he Done is try to acquire his way out of this.

36:33

He would have tried to buy a fledgling, social network.

Maybe try to acquire Tick-Tock, maybe, you know, it’s probably too late for that now.

But you know, try to acquire be real, try to acquire something that has some momentum and some energy behind it, especially with younger users, and try to integrate that into into, you know, what he’s doing.

36:52

But he’s not going to be allowed to do that the FTC and other Regulators have made it very clear.

That Facebook is never going to be allowed to buy a smaller social.

At work again.

And so really, this is his only chance.

And so, I think it’s, it’s, it’s born of desperation masks as excitement about some new, you know, fancy new Computing Paradigm.

37:14

Just add one more thing about that they try to buy a gift search engine, okay?

Gifts are already irrelevant right, but three years and then his acquisition process, the UK competition and markets Authority, says no, this would destroy competition on Earth.

If Facebook were able to integrate a gift search engine, which Not used by anyone under the age of 30.

37:35

If they cannot buy giphy then.

Yeah, Mark Zuckerberg has to have a new plan B.

Yeah.

But this is such an important point which is that right?

He wants to become a homeowner.

Be can’t acquire a home.

He has to build himself, right?

He can’t go out into the market, to buy any kind of platform.

37:50

Because Regulators have basically decided across the board in Europe in America, that meta is done with Acquisitions.

They are not allowed to acquire anything else that God Instagram that got WhatsApp.

Sorry, that’s it.

It you’re done Casey, how how are they proving the success of this program on a quarter by quarter basis because it’s it’s very strange for a publicly traded company.

38:15

To essentially say, we plan on spending something between 100 and 200 billion dollars over the next X years to build the future.

Typically, what you do is you build an iPhone and the iPhone is pretty good and then you improve it, you build another iPhone and then you will die phone, three and four.

And it blooms and there’s an ecosystem of two.

38:30

Economies that Grow up around it and that’s how the company pays for itself.

It’s very odd to call your own home.

Run shot here like Babe Ruth.

How how are they showing that this is working on a quarter by quarter basis?

They don’t think like that, they don’t think on a quarter by quarter basis like like all of the financial analysis that gets written about face.

38:48

I mean I’m sure the CFO reads it.

But Mark Zuckerberg, you know, is the king of Facebook and Facebook has vast amounts of wealth and he will spend as much of that wealth as he needs to spend to do what he wants.

As the king of Facebook, I am quite confident.

He is not thinking like what message does my quarter by quarter metaverse spending sending to the street.

39:08

Now, you know, maybe things will get so bad that will have to start paying more attention and they’ll have trouble attracting and retaining employees because of stock-based compensation, all that stuff, but to the extent that he can never think about one word that you just said he is doing that.

Isn’t it pretty weird?

39:24

I mean, it’s pretty.

It’s pretty odd that we’re like in this generation where I don’t know when to do a class structure Norm became like the thing in Silicon Valley, but like, it’s really historically bizarre for there to be essentially a hazard of a public company who can do whatever he or she wants without concern for the markets on a quarter by quarter basis and and arguably you could say that like you know we’re not going to have the whole debate over like what’s best to public or private company.

39:51

But one of the ways that Public companies have worked for decades, is that investors have had input into the companies that they own.

And if Zuckerberg is basically saying, when you buy shares of meta, when you buy shares in Facebook and in me, you don’t own anything, you don’t own the ability to change my mind at all.

40:12

I’m the Czar of this company, I’ll do whatever I want.

Why would you invest in this?

Unless you had some almost like religious faith in zux ability to see the future?

Well, because over the past 15 years, I was one of the Best investments.

You can make right?

Like the thing just printed money and to take the other side of your argument.

40:28

If it had been a bunch of investors who are making the calls about what Facebook should do, they would have just pushed him to like optimize ads.

Like, you know, introduce more ad slots do more of the thing that you’re already doing and what Zuckerberg has observed.

Looking at the past hundred years of public markets, is that, you know, whatever, the biggest company in the world today it’s like not going to be the biggest company in the world five years from now, right?

40:50

And in part it’s because of this slavish Devotion to these Early deadline.

So there are multiple moments and Facebook’s history where he is said, you know, even though the market is going to hate this, I’m going to do it anyway because I think it’s in the long-term best interest of the platform and up until this moment he’s basically been right?

41:06

Every time I do think this is a different and much riskier moment.

That’s why he has the confidence to do what he’s doing.

Kevin Casey, do you do you use Oculus?

Do you use the meta products that are a part of this metaphor?

Sweet.

We tried to use Sit on a podcast taping the other day.

41:27

It was like kind of a disaster.

I mean, we, you know, I have an Oculus that I barely ever use and, you know, the first time you dig it out of the box in six months and turn it on it.

Like he’s like an hour long process of getting it updated and all the, you know, all the software installed and it’s just like, it’s not like a seamless out-of-the-box experience, we did manage to, like, tape the podcast, you know, part of it in VR, but it was not like a smooth or in Rebel process.

41:54

I so I have a review unit of the medic West Pro which is the very expensive new headset.

And honestly I’ve only spent a handful of hours in it.

It’s much better than the thing that we recorded the podcast in.

But there’s just still not that thing.

42:11

That makes me feel like I want to be in this everyday.

I would almost always rather be playing my PlayStation 5, then doing anything in BR, and I think, look, I think this will keep getting better.

We should also say, they’ve sold more VR.

Headsets than any company in the world, right?

They’ve sold we think more than 15 million units.

42:27

So, it isn’t as if they have no empirical basis to assume that they can become the biggest VR company in the world because in a lot of ways they are today, right?

But they have a long way to go.

Kevin, I want to ask about a company that’s behind a lot of these stories, even if you haven’t mentioned it, a lot and that is Tick Tock.

42:45

The body ministration has sort of and maybe case you can correct me here.

But about Administration seems to have sort of like peaked around the corners of maybe we should.

Find a way to ban Tick-Tock, maybe we shouldn’t obviously Republicans have a pretty clear line on China.

The Chinese Communist party, which is that they don’t like it very much and they might find some interest politically in taking on Tick-Tock.

43:05

Do you have any optimism or pessimism depending on your opinion of tick-tock that there could be congressional action in the second half of Biden’s first term on Banning tick-tocking America?

Yeah, I think there could be action.

43:20

I think that it’s you know, I I’m coming around to the view that it’s probably more likely than not.

That Tick-Tock will either be banned or forced to sell to an American company in order to continue operating in the u.s., I think there’s bipartisan support for that, and I think that people are really just looking for for one Smoking Gun.

43:41

One point of proof that the Chinese government is using Tick-Tock to either push De or interfere in American elections or influence the minds of America’s teens.

I mean, it’s really a story that that is is Sensational if if the evidence is there to support it.

44:03

And so I think there will be continued quest to look for that evidence.

And I also think that the, you know, the sort of American tech companies are going to step up their their lobbying and advocacy around this issue in trying to get Tick-Tock band.

Heart because it would be good for their businesses.

44:20

We should also say that.

I mean, the so Vanessa Pappas is the CEO of tick-tock has said that they’re pretty far along in a deal with the Council on Foreign investment in the United States Sophia’s and it is possible that they could reach a deal before the end of the year.

44:37

Now that’s not to say there wouldn’t be new pressure on the company if Republicans take power, but I had actually do also see a world where it just sort of continues to exist.

In the world in which Tick Tock is forced to sell in order to operate United States.

Does that mean that an American company would buy Tick-Tock?

44:54

Like it would be Oracle Tick Tock or Microsoft Tick Tock, which means we would have a new entry into the social media Wars Casey.

Yeah, I mean, that’s the, the idea like the thing that is going to remove a tick tock from the cloud of Suspicion is just that there is no possible way that the Chinese government can access user data or use the network to.

45:17

So, So propaganda sort of at a systemic level and the only way to do that is to sort of get it out of the, the hands up B, dance given ruse, Casey Newton, the podcast is hard Fork, gentlemen.

Thank you very, very much.

Thanks Derek.

Thanks for having us.

Thank you very much for listening.

45:33

Plain English is produced by Devon man.

See, if you have a comment, a concern, a question and idea for a future show, please email us at plain English, at Spotify.com, that’s plain no space.

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